For the Current Year company XYZ earned an EBITDA of 350M. Their Depreciation/Amoritization expense was 125M, interest expense was 75M, tax rate was 21%, their current market cap is 1350M.

For the following year company XYZ has been given EBITDA guidance of 550M. Their Depreciation/Amoritization expense, interest expense, and tax rate will remain the same.

1.Show your steps for calculating net income for the current year, and trailing P/E ratio.

2. Show your steps for calculating net income for the following year, and forward P/E ratio.

3. What rate of return does the forward PE ratio from question 2 correspond to?